Rotorua residents want to take the city back and are upset emergency housing tenants are filling motels instead of tourists.
Last week, the Ministry for Housing and Urban Development applied for resource consent to turn 12 of the city's motels into transitional housing for more than 1000 people.
Rotorua's Fenton St was now being labelled as the "MSD (Ministry of Social Development) Mile" due to the growing number of homeless people being housed on the street's emergency motels. There have been reports of people openly dealing drugs, cars being broken into, people being abused and properties being vandalised.
Restore Rotorua is a group that wants to revive the city's reputation. Chair Trevor Newbrook told AM the Government needed to build permanent housing for those in need.
"We have, maybe, 40 motels in Rotorua currently with emergency housing people in there," he told host Melissa Chan-Green. "We need to move people out of emergency housing motels.
"I think what we've got is a situation where Rotorua is being used as a dumping ground for homeless people and that needs to stop."
Newbrook said the situation was concerning. With motels full of homeless rather than tourists, he said it was affecting local businesses.
"What we've got here is a huge cumulative effect… Fenton St, which used to be known as Rotorua's 'Golden Mile', and now it's Rotorua's 'MSD Mile'. You have about 20 motels - an absolute cluster of them - with people with all these issues."
There needed to be a plan to address the situation, Newbrook said.
"I don't think putting people with all these issues together in a very small area is helping them or helping our town.
"What I want the Government to do is actually come up with a plan about how we're going to get these people out of emergency housing and into proper housing.
"There doesn't seem to be any plan… What have they come up with? When the minister is interviewed, all she says is, 'It's the National Party's fault.'
"I don't care if it's Helen Clark or John Key that is to blame - I want to know what's happening now."
Earlier this month, the Rotorua Lakes District Council said it would look into a targeted rate for providers of emergency housing, Local Democracy Reporting said.
Newbrook said he was on board with that solution.
Housing Minister Megan Woods has previously said housing shortages followed decades of "insufficient" new stock and the "selling of thousands of state homes" by the previous National Government.
Emergency motels were a "short- to medium-term solution", she said in March.
Prime Minister Jacinda Ardern said earlier this year that, ideally, New Zealand wouldn't be using emergency housing at all - "but I would still rather be using those facilities than having people in cars or garages or on the street".
